The cryptocurrencies bear market could last longer as bitcoin confirms its recent breakdown below $20,000, according to a note from Fairlead Strategies.
The technical analysis-focused research firm highlighted that bitcoin is currently testing a support range of between $18,300 and $19,500 following last week’s CPI-induced sell-off. Bitcoin was down about 0.5% at $18,950 after the Fed announced another 75-basis-point rate hike Wednesday afternoon.
“Negative long-term momentum is growing per the monthly MACD histogram, allowing long-term oversold conditions to be absorbed. As it stands, it could take months for a meaningful shift,” Stockton said, referring to the Moving Average Convergence-Divergence indicator. “Short-term momentum has shifted negative per a new daily MACD ‘sell’ signal, increasing risk as long-term support is tested.”
Bitcoin’s short, intermediate, and long-term momentum signals have become bearish amid the ongoing decline. The rollover of its 50-day moving average suggests momentum could continue to the downside, according to Stockton.